Linking corporate social responsibility with

admiration through organizational

outcomes
Juan-Gabriel Cegarra-Navarro and Aurora Martnez-Martnez

Juan-Gabriel
Cegarra-Navarrois and
Aurora Martnez-Martnez
are both based in the
Business Management
Department, Polytechnic
University of Cartagena,
Spain.

Abstract
Purpose From the decision-makers viewpoint, the success of a social responsibility program rests
heavily on a corporations ability to create links in the public consciousness between the CSR activities of
an organization and its performance to different stakeholders. However, thinking broadly about CSR
outcomes often results in a list that is much too long to be of any practical use. The purpose of this paper
is to provide an empirical study to provide understanding as to why business organizations are
increasingly engaging in corporate social responsibility issues.
Design/methodology/approach The paper investigates whether CSR initiatives have any impact on
six organizational outcomes through an empirical investigation of 100 large firms in the Spanish MERCO
(Monitor Espanol de Reputacion Corporativa) using repeated ANOVA measures.
Findings The results indicate that the benefits of CSR issues fall within five major categories; namely:
quality of products and services, global business, innovativeness, corporate culture, and ethical
obligations. However, it is surprising to find that CSR had no significant effect on financial soundness.
Research limitations/implications The use of admiration can enable stakeholders to develop
consensus and creative processes relating to the design of new requirements where CSR activities are
incorporated into business activities.
Practical implications The implication for management practice is that CSR activities represent a
long-term programme to change, and a proactive way to improve admiration.
Originality/value The paper shows that social responsibility is not always detrimental to company
goals and performance
Keywords Corporate social responsibility, Organizations
Paper type Research paper

1. Introduction
Corporate social responsibility (CSR) initiatives have experienced unprecedented growth in
the last few years (Barone et al., 2000). Companies are engaged in many types of social
responsibility activities, such as acts of responsibility towards the environment, treating
employees fairly or contributions to art and cultural programs in the community (Barone et al.,
2000). However, as Brown and Dacin (1997) quote, companies do all these good things...
but they do not know if they get anything out of it. The benefits sought by companies
considering, or in the process of implementing, a CSR initiative include: meeting customer
expectations; demonstrating commitment to environmental responsibility; improved
environmental performance; staying ahead of legislation; and increased employee
motivation (Zairi and Peters, 2002).
The benefits listed above clearly imply that companies seek a range of different outcomes
from their CSR issues beyond recognition, but companies may be implementing CSR
issues without knowing how CSR could affect their outcomes (Decker, 2004). To date, there
is growing evidence of the widespread use of CSR practices, but there is selective evidence
that the adoption of these management practices leads to improved organizational

DOI 10.1108/17471110910995357

VOL. 5 NO. 4 2009, pp. 499-511, Q Emerald Group Publishing Limited, ISSN 1747-1117

SOCIAL RESPONSIBILITY JOURNAL

PAGE 499

performances (Aguilera et al. 2007). However, organizational studies have shown that
managers wanting the firm to become involved in CSR activities (Pfeffer, 1992), will need to
have the power to put CSR on the agenda and to align the activities with the firms strategic
goals. In other words, the complexity in designing and implementing a CSR initiative may
influence many organizational outcomes including financial soundness; quality of products
and services; corporate culture; ethical obligations; effectiveness in doing business
globally; and innovativeness.
The major focus of this research is to investigate whether CSR initiatives have any impact on
the above six organizational outcomes through an empirical investigation of 100 large firms
in the Spanish MERCO (Monitor Espanol de Reputacion Corporativa). To develop the
empirical study, the companies were categorized into two groups: group 1 companies
without CSR initiatives; and group 2 companies with CSR initiatives. Companies
designated as having CSR initiatives were selected based on the possession of CSR issues
on their web sites (Esrock and Leichty, 1998). The relationship between CSR initiatives and
organizational outcomes is discussed and presented in the next section.

2. The conceptual framework

CSR is defined as . . .operating a business in a manner that meets or exceeds the ethical,
legal, commercial and public expectations that society has of business (Business for Social
Responsibility, www.bsr.org). This definition seems to be in harmony with the triple P concept
of People, Planet and Profit, which is conceived by many people in business as the basis of
CSR. Although the distinction between social and economic activities has been applied in
several studies (Maignan, 2001), the distinction between them is thin. As Aguilera et al.
(2007) argue, the firms main goal is to survive by means of achieving a competitive
advantage in the economic market. CSR mechanisms exist to sustain firm survival and
efficiency. Therefore, CSR activities may be related to the performances of the organization
(i.e. activities which result from the company mission and aim at profit making).
The ways with which each company communicates its position on the issue of CSR and the
activities it implements defer according to the sector in which it belongs and the sort of
activities (Gao et al., 2002). In this study we have considered the corporate social
responsibility report released through the web. This social report refers to publications
through which businesses adopt a view of reporting their wide range of responsibilities
towards their stakeholders (Belal, 2002). While the report is issued voluntarily and
businesses use different models, guidelines and methods of reporting, a social report could
include some basic elements such as: statement of principles (mission, values); practices
and procedures; and effectiveness of the organisation (Belal and Owen, 2007).
However, the purpose of corporate social responsibility practices will be different for each
individual in the organization (Gao et al., 2002). From an employees point of view, CSR
can be conceived as an investment (the time and effort to learn) in the social activity, while
CSR will be driven by institutional objectives (e.g. survival and growth) from the point of
view of the management (Waldman, 2007). Therefore, if different stakeholders understand
the goals that shape their corporate social responsibility practices, it becomes possible to
see what creates the events and crisis they observe. This awareness allows them to change
the source of the problem rather than just dealing with symptoms (Ackoff, 1974).
The above considerations lead us to argue that the adoption of CSR actions requires a basic
understanding and skill in systems thinking (Knez-Riedl et al., 2006). The creative capacity
of a thinking system offers unique opportunities, such as how to produce the desired
outcomes (when system parts may prefer a different outcome) or how to diffuse innovations
that are proven to be effective (Waldman, 2007). Regarding this, Interactive Planning was
developed as a method to ideally allow all stakeholders to participate in the various stages of
the planning process (Ackoff, 1981). It is a participative method of dealing with a set of
interrelated problems when it is believed that unless something is done, a desirable future is
not likely to occur; and that if appropriate action is taken, the likelihood of such a future can
be increased (Ackoff, 1981).

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As noted above, Interactive Planning is a system that acknowledges the interdependence

of the problems within a system. It proceeds from a treatment of the whole to the
interaction of the parts and then finally to the parts themselves. In Interactive Planning
terms, a mutual admiration society facilitates the participation of all stakeholders. For
example, admiration encourages customers to buy more and to stay loyal, employees to
work harder, suppliers to be more supportive, and shareholders to also remain loyal
(Thompson, 1998). Admiration is also a source of happiness (Dobbins and Pettman,
1997), which allows incorporation of aesthetic value into planning, generates consensus
and commitment and mobilizes participants, releases suppressed creativity and
harnesses it to individual and organizational development (Ackoff, 1974). However,
before we can admire others, we have to admire ourselves (Dobbins and Pettman, 1997).
But how we can admire ourselves?
The world of success and failure in business is a mental world in which everything starts with
ideas. For organizations, the level of admiration tends to be determined by past experience,
the present situation, and organizational outcomes (Dominick, 2007). Companies tend to be
more admired if, in the past, they have worked in a positive environment where
performances have been achieved. Under this framework, as shown in Figure 1, CSR is a
cyclic learning process in which CSRs value is to offer inspiration on how to be admired
continuously and effectively. That is to say, that CSR is a prerequisite for admiration, but the
benefit of CSR activities also depend on the amount of admiration that has already been
accumulated and exploited through the interactive planning (e.g. by being involved in the
interactive planning process, stakeholders come to understand the system and their roles
also match the prerequisite of the main task of CSR activities).
Since admiration is a goal that allows any system to be understood and managed as a
single entity among different stakeholders, it is required to analyze the range of outcomes
achieved by CSR actions by identifying common sources for admiration. In this regard,
Thompson (1998) suggests that sound profits and a strong balance sheet are very
important, but they alone will not necessarily lead to a company being admired. In the
1980s, and based on research in the USA by Fortune, The Economist and The Financial
Times began to investigate which companies were most admired by other businessmen,
particularly those with whom they compete directly (e.g. The Global Most Admired
Companies, the Worlds Most Respected Companies). More recently, the Complutense
University of Madrid has taken over a similar project in Spain, in association with Villafane
and Asociados and the newspaper Cinco Das, has published a ranking with the most
admired companies in Spain (The MERCOs annual list). The criteria used in the MERCOs
annual list are as follows:
Figure 1 A framework for development of CSR

VOL. 5 NO. 4 2009 SOCIAL RESPONSIBILITY JOURNAL PAGE 501

Financial soundness (FS).

Quality of products and services (QPS).

Corporate culture (CC).

Ethical obligations (EO).

Effectiveness in doing business globally (BG).

Innovativeness (IN).

Now the question is how organizations develop the outcomes above using CSR initiatives.
Whether CSR activities are effective in influencing a companys financial performance
remains uncertain. Stanwick and Stanwick (1998) reviewed the studies that examine the
effects of CSR on financial performance and concluded that there is a weak but positive
relationship. Similarly, Pava and Krausz (1997) found that 12 of 21 studies showed
positive associations between CSR activities and indices of financial performance. It
seems that consumers exercise their voice through practices, such as a willingness to
pay more for certain goods and services (Smith, 1990), or consumer boycotts (Kozinets
and Handelman, 2004). A good example of this was when Nike was accused of allegedly
using sweatshops in its offshore operations. Consumer groups mobilized to boycott its
products (Knight and Greenberg, 2002), influencing Nike to introduce changes in its
global labour practices. This consideration allows us to frame the first hypothesis of the
work:
H1.

CSR initiatives ! Financial soundness.

It is crucial for todays organizations to be able to manufacture and deliver quality products
and services cost-effectively. In this regard, managers may have some instrumental motives
to push for CSR when social initiatives are directly related to the greater competitiveness of
the firm, such as by protecting a companys reputation (Bansal and Clelland, 2004). For
example, managers might have instrumental motives for persuading the company to
engage in CSR efforts when those efforts are compatible with long-term employee welfare or
investing in research and development of high-quality products (Hall and Soskice, 2001).
Given that this inversion in R&D could lead to a number of business advantages such as
better quality (McWilliams and Siegel, 2000), we also propose the hypothesis:
H2.

CSR initiatives ! Quality of products and services.

From the point of view of corporate culture, the implementation of CSR initiatives fosters
important changes in an organization (McAdam et al., 1996). The changes include
structure and responsibility, training and awareness, communication, documentation and
control and emergency preparedness (Chin et al. 1999). Corporate culture includes
elements such as core values and beliefs, corporate ethics, and rules of behavior (Deal
and Kennedy, 1982). Therefore, it is important to recognize that the mechanisms that are
used to define and communicate any change are never context free, they are always
created, shared, and leveraged within a context shaped by the organizations culture. In
other words, the integration of CSR issues is helping companies reassess their corporate
cultures as a contribution to share responsibilities (McAdam et al., 1996). Therefore, we
propose:
H3.

CSR initiatives ! Corporate culture.

The effective development and implementation of CSR initiatives is inevitably associated

with ethical and moral aspects (Harrison, 2003). Donaldson and Dunfee (1999) discuss how
stakeholders can demand ethical obligations on companies via voice, consent, and exit. As
noted above, research on brand image shows that, given the choice, some consumers will
pay more for a product from a good company than from a bad company (Sen et al.,
2001). Therefore, the implementation of a CSR initiative should develop, establish and
maintain procedures for improving the organizational ethical impacts that may be
associated with the societys collective good. For example, companies may implement
CSR initiatives that use less hazardous materials, resulting in less hazardous waste needing

PAGE 502 SOCIAL RESPONSIBILITY JOURNAL VOL. 5 NO. 4 2009

to be buried, which in turn may result in less soil and ground water pollution (Kuhre, 1995).
Therefore, we propose:
H4.

CSR initiatives ! Ethical obligations.

International actions such as the UN Global Compact (substantive human rights standards)
or the Global Reporting Initiative (social, economic, and environmental disclosure format)
are important factors, influencing companies to implement CSR initiatives and so become
agents of social change (Aguilera et al., 2007). Under this framework, a CSR program may
become the primary requirement for doing business globally BG. As Kagan et al. (2003)
argue, multinational companies, particularly the high-profile ones, are expected to be
pioneers in adopting CSR initiatives to reach social expectations, which in turn reinforce
other factors, such as consumers, and institutional investors. These aspects are also studied
in our investigation in the fifth hypothesis of the work:
H5.

CSR initiatives ! Effectiveness in doing business globally.

Innovativeness represents a firms ability to differentiate itself from competitors in terms of

developing new products and services (Xueming and Bhattacharya, 2006). CSR activities
often create tremendous value when they cater to very basic humanitarian needs; for
example, starting from the consideration that green issues may represent a significant
driver of product differentiation, the introduction and/or greater attention towards the
implementation of design for recycling, design for dismantling and design for disassembling
techniques, allow the product manager to identify the best trade-off between a products
eco-compatibility and its contribution to profitability. Consequently, executives encourage
innovation by considering CSR initiatives as environmentally friendly design techniques in
the development of new products and services (e.g. Azzone and Noci, 1998). Under this
framework the hypothesis that we propose is:
H6.

CSR initiatives ! Innovativeness.

The next section examines the methodology for the delineation of this research.

3. Methodology
In order to contrast the above hypotheses, we used a list of 100 companies indexed in
MERCOs list as an initial sampling frame. The MERCO list establishes a ranking of the most
admired companies in Spain. The MERCO 100 company list is a ranking of the top 100
Spanish organizations as measured by gross revenue, although eligible companies are any
for which revenues are publicly available[1]. In this regard, all companies are required to
have at least 45 million euros in revenue to be eligible for the list. Villafane & Asociados
compiles and publishes the list of MERCO 100 companies annually.
Data collection
The measures relating to the existence of an FS; QPS; CC; EO; BG; and IN scale consisted
of six indexes designed by Villafane and Asociados (2005) to create a ranking of the most
admired companies in Spain. In the case of our study, this information was collected using
data from the MERCO annual report for 2004 (Villafane and Asociados, 2005). The results as
shown in Figure 2 contain six indices that explain certain social and economic
characteristics. These measures reflect multiple perspectives and stakeholder interests,
and they are based on pilots involving a series of interviews with consumer associations,
trade union associations as well as a pool of industry analysts. Villafane & Asociados
transforme these measures into six indices with a range of 0 to 3 to facilitate comparison
(Roos and Roos, 1997). As shown in Figure 2 the scale points are: (0) no achievement:
B

low levels of achievement;

medium levels of achievement; and

high levels of achievement.

VOL. 5 NO. 4 2009 SOCIAL RESPONSIBILITY JOURNAL PAGE 503

Figure 2 The MERCO annual report for 2004

In order to develop an appropriate measure for the construct CSR, based on Esrock and
Leichty (1998), every web page of each company on the most admired list was examined to
identify the presence of CSR reports on their web sites (1 yes or otherwise 0). As a result of
the above answers, we got a variable (CSR) with a minimum value of zero and a maximum
value of one. In three cases where this information was available, the information was also
collected by means of telephone interviews with the technical manager of the business using
a simple structured questionnaire. Respondents were asked to indicate which social
initiatives they have. All answers were related to social causes, e.g. donation of a specific
amount for charity per sold product unit, with the parallel accomplishment of business
targets. In fact, such initiatives were been used by businesses as communication tools to
demonstrate their commitment and investment on social causes.

Assessment of the measures

To examine potential non-response bias, we compared companies included in MERCOs
annual report for 2004 and the MERCOs annual report for 2005 on three variables (turnover,
total assets and number of employees). None of these three t-tests for differences between
the sample and the population means was statistically significant at the significance level of

PAGE 504 SOCIAL RESPONSIBILITY JOURNAL VOL. 5 NO. 4 2009

0.05. The absence of differences is consistent with the claim that response bias seems not to
be a major problem (Armstrong and Overton, 1977).
The system repeated ANOVA measures were used to prove the explanatory power of only
one factor or independent variable, not metrics, in our case (CSR 1 and no CSR 0), on a
set of dependent variable metrics (i.e. FS; QPS; CC; EO; BG; and IN). As dependent
variables of repeated ANOVA measures may be highly correlated with the independent
variable when there is no correlation amongst them, they can present problems of
multicolinearity (Peterson, 1994). Therefore, using the correlation matrix (see Table I) as an
initial guide, tolerance and variance inflation factor (VIF 1=tolerance) were calculated.
The tolerance value indicates the percentage of variance in the predictor that cannot be
accounted for by the other predictors. Therefore, very small values indicate that a predictor
is redundant, and values that are less than (0.10) or equivalent when VIF . 10 suggest a
need for further investigation. Furthermore, all condition number bounds from the seven
components were not greater than fifteen, with the lowest eigenvalue for the sixth dimension
being 0.043 (see Table I), thus confirming that multicolinearity does not exist among the
variables included in the analysis (Hair et al. 1998).
Table I also provides an overview of the constructs means, standard deviations and
correlations.

4. Results
Mauchlys test of sphericity tests the null hypothesis that the error covariance matrix of the
orthonormalized-transformed dependent variable is proportional to an identity matrix. As
Mauchlys test of sphericity is significant x 2(14)105.847 with a significant level of
p , 0.01, we can assert that the dependent variables are related. As shown in Table II, the
multivariate contrast analysis shows that the lambda of Wilks is 0.883 with a significant level
of p , 0.05. Furthermore, the partial Eta squared is 0.117 and the observed power is 0.755.
As a consequence, CSR has an explicative power on dependent variables (FS; QPS; CC;
EO; BG; and IN).
Tests of the effects within subjects show an F value of 22.715 at a level of p , 0.01.
Therefore, we can assert that there are some differences among the means of FS; QPS; CC;
EO; BG; and IN. The effect size for each independent variable was (0.188), with an
estimated power of (1). The interaction MERCO*CSR shows an F value of 2.906 at a level of
p , 0.05. Therefore, there are also differences among the means of the interaction
MERCO*CSR. In this case, the effect size for each independent variable was 0.03 with an
estimated power of 0.79. Tests of the effects within subjects show an F value of 25.609 at a
level of p , 0.01. Therefore, we can assert that there are differences depending on whether
or not there is the presence of CSR initiatives. The partial Eta squared is 0.207, and the
observed power is 0.99.
If we analyze the univariate tests, it can be observed that the meaningful difference is found
concretely in the QPS (F value of 12.415 at a level of p , 0.01). Table II also shows that CSR
had a positive influence on BG and IN, both with a level of p , 0.01. Table II, again, shows
Table I Correlation matrix analyzed

n value

CNB

0.558
0.912
0.630
0.424
0.335
0.097
0.043

1.000
2.236
2.689
3.279
3.686
6.861
10.294
a

FS
QPS
CC
EO
BG
IN
CSR

FS

QPS

CC

0.65
1.42
2.05
1.50
1.35
0.71
0.55

1.09
1.14
1.00
1.12
1.34
1.03
0.50

1.000
0.096
0.054
2 0.344a
2 0.2.98a
2 0.191c
2 0.107

1.000
2 0.081
0.079
0.327a
0.252b
0.335a

1.000
2 0.068
0.464a
0.300a
0.167c

EO

1.000
0.064
2 0.004
0.243b

BG

1.000
2 0.006
0.268a

IN

1.000
0.313a

CSR

1.000

Colinearity
statistics
Tolerance
VIF

0.512
0.506
0.428
0.834
0.368
0.548

1.954
1.976
2.338
1.199
2.717
1.826

Notes: ,0.01; p , 0.05; p , 0.1; Condition number bounds (CNB); Mean (m); Standard deviation (s) VIF: variance inflation factor

VOL. 5 NO. 4 2009 SOCIAL RESPONSIBILITY JOURNAL PAGE 505

Table II ANOVA CSR factor

Variable

CSR

Partial eta squared

Observed power

FS

No
Yes
Total

0.778
0.545
0,650

1.146
1.033
1.086

45
55
100

1.134

0.011

0.184

No
Yes
Total

1.000
1.764
1.420

1.000
1.138
1.139

45
55
100

12.415a

0.112

0.937

No
Yes
Total

1.867
2.200
2.050

1.057
0.931
0.999

45
55
100

2.807c

0.028

0.382

No
Yes
Total

1.200
1.745
1.500

0.991
1.174
1.124

45
55
100

6.134b

0.059

0.689

No
Yes
Total

0.956
1.673
1.350

1.261
1.320
1.336

45
55
100

7.606a

0.072

0.780

No
Yes
Total

0.356
1.000
0.710

0.743
1.139
1.028

45
55
100

10.681a

0.098

0.899

2.486b
22.715a
2.906b
25.609a

0.117
0.188
0.03
0.207

0.899
1.00
0.79
0.99

QPS

CC

EO

BG

IN

Wilks lambda (0.883)

Tests of within-subjects effects
Tests of within-subjects effects
Tests of within-subjects effects
Mauchlys test (0.332)

MERCO
MERCO*CSR
CSR
x2(14)105.847a

Notes: a ,0.01; b p , 0.05; c p , 0.1; Mean (m); Standard deviation (s)

that CSR had some significant effects on CC and EO with levels of p , 0.1 and p , 0.05
respectively. Consequently, we can assert that CSR has a positive influence on QPS, BG, IN,
CC and CSR. This analysis supports H2, H3, H4, H5, and H6 respectively. The theoretical
and managerial implications of the bi-directional relationships observed across those
constructs are discussed in further detail in the following section.

5. Discussion
Thinking broadly about CSR goals often results in a list that is much too long to be of any
practical use, and that is because the answer depends on the responder. However, decision
makers must know where they are going; otherwise, they will never get there or even know that
they got there (Waldman, 2007). Therefore, in order to apply corporate social responsibility
practices successfully, decision makers must first define what results they really want and
consider how the long-term outcomes might emerge from CSR actions. This study represents
an attempt to address the deficiency in research literature concerning the outcomes of firms
CSR efforts. The performance outcomes included in this study are based upon the criteria
used in the MERCO annual list. This decision is justifiable, due to the success and usefulness
of these criteria among Spanish companies (Villafane and Asociados, 2005).
This researchs first contribution is to create awareness of the relevance of admiration and
organizational outcomes when discussing the managing of CSR. For companies
implementing CSR actions, the use of admiration would help stakeholders to visualise
alternative scenarios for action in which they incorporate CSR into their activities (Knez-Riedl
et al., 2006). The amount or intensity of CSR initiatives at a moment (T) has an impact on
organizational variables (for example in terms of increased investor confidence, customer
loyalty, conservation of materials or energy, prevention of negative environmental impact,
adherence to industry codes or legislative requirements, decreased costs, process and
product innovation, amongst others), which in turn have an impact on admiration. In short,
the use of admiration can enable stakeholders to develop consensus and creative

PAGE 506 SOCIAL RESPONSIBILITY JOURNAL VOL. 5 NO. 4 2009

processes relating to the design of new requirements where CSR activities are incorporated
into business activities.
This researchs second contribution derives from the results of the models empirical test.
The findings corroborate that the presence of a CSR issue contributes positively to help firms
adequately achieve QPS, BG, IN, CC and EO performances. This means that managers
could take advantage of QPS, BG, IN, CC and EO performances as a means of creating
scenarios culturally desirable. On the decision makers terms, these findings can be used to
compare and contrast different scenarios and support the individuals internalisation of
created knowledge via agreements on feasible and desirable changes, thereby facilitating
managing processes (Gao et al., 2002). However, we were surprised to find that CSR had no
significant effect on the financial soundness. Therefore, our results do not support the views
of Sen and Bhattacharya (2001) that there is a positive association between CSR and FS.
Considering this, we argue that the implementation of CSR needs to involve changes in the
organization (e.g. technologies, structure, responsibility, etc), the consequences of which, in
turn may involve initial set-up costs and subsequent maintenance and improvement. These
results support the suggestion of McWilliams and Siegel (2000), that the cost of CSR
activities is too high and the economic and institutional benefits are often long term.
Consequently, these findings support that todays FS can come from yesterdays QPS, BG,
IN, CC and EO and therefore, the implication for management practice is that CSR activities
represent a long-term programme to change, and a proactive way to improve admiration.
With regard to H2 (CSR ! QPS), the findings demonstrate a bilateral association between
CSR and QPS. Therefore, results support the suggestion of Hall and Soskice (2001), that
perceived CSR activities, such as control programs, machine safety, honest information in
advertisements and extensive product checks, affect product quality and ultimately
services, in terms of cost-effectiveness. In the same manner, an organisation committed to
the environment is more likely to bolster team spirit, engender loyalty, and increase the
organisations ability to attract high quality staff. Under these circumstances, employees can
optimise and control the activities and processes affecting quality in order to achieve their
policies and promises (McWilliams and Siegel, 2001).
In testing H3 (CSR ! CC), our findings demonstrate a bi-directional association between
CSR and the CC. This finding corroborates the notions of McAdam et al. (1996), that the
implementation of CSR activities may be helpful for organizations to establish an effective
culture by documenting and communicating roles and responsibilities. This may indicate
that one of the important aspects of CSR issues is the support it provides for developing and
maintaining an organizations culture with external and internal relationships. For example,
environmental responsibilities should not be seen as confined to the environmental function,
but should also include other areas of an organization (Pun and Hui, 2001). Thus, potentially
implementing a CSR program provides an environment that supports the dynamic
modification of corporative culture when this proves necessary.
Regarding H4 (CSR ! EO), our results support a positive relationship between CSR and EO.
This implies that CSR develop and implement corresponding response actions to improve the
organizations ethical performance in a practical manner leading to compliance with social
legislation (Business for Social Responsibility, www.bsr.org). Similarly, competitiveness can
also be enhanced by improved company public image and staff morale, as a consequence of
ethical performances (Hosmer, 1994). The question then arises if it is ethical to use CSR as a
marketing strategy. In Spain, this fact has given rise to a growing quantity of companies that
are using CSR as a marketing gimmick rather than as a way of conducting business.
With regard to H5 (CSR ! BG), the findings also highlight how CSR contributes to BG and
what authors such as Schouten and Remme (2006), refer to. They state that CSR is not
merely a method by which embedded social ideas are revamped to increase
competitiveness; it is equally regarded as an approach designed to be in compliance
with laws and legal requirements. That means that CSR provides a way of ensuring that
products conform to specific requirements, which in turn may allow firms to reach global
markets without limitations originating from social issues. For example, green differentiation

VOL. 5 NO. 4 2009 SOCIAL RESPONSIBILITY JOURNAL PAGE 507

may produce economic value, because it enables the enlargement of market access
globally for eco-friendly products (Roy and Vezina, 2001). Consequently, as customers are
putting high priority on legislative requirements, organizations adopting CSR may have a
larger pool of potential customers to choose from their competitors, giving them a
competitive advantage in international markets.
In testing H6 (CSR ! IN), the findings demonstrate a bi-directional association between
CSR and IN. This accomplishes what authors, such as McWilliams and Siegel (2001),
express when they highlight that innovativeness is profoundly influenced by CSR issues,
such as the reduction in environmental impact of products and processes, and the quality of
both production processes and work environment, and often go well beyond the
prescriptions of national and international regulations regarding such matters. For
example, implementing CSR activities can help managers to adopt new processes, such
as pollution prevention and product stewardship, which in turn could be associated with
higher levels of innovation (Kuhre, 1995).
This study has some limitations. First, it has been observed that relatively larger companies
are more inclined to be socially conscious. The reason for this may be that the smaller
companies may find it riskier to invest in social strategies because of their resource
constraints. Considering this, future studies including large and small enterprises may help
improve the rigor of the results. Second, national cultural issues might influence the way
organizations promote corporate social responsibility practices. Therefore, it would also be
interesting to extend the study to other countries, since national cultural issues might
influence the results. Furthermore, future research, including companies from different
sectors (e.g. telecommunications and chemical) should be addressed to analyze the
relationship between the companys activity and its CSR.
On the other hand, only objective information relating to the measurement of firm performance
(i.e. FS; QPS; CC; EO; BG; and IN) was used, thereby subjective measures should be used to
supplement objective information (e.g. CEO surveys). Although this kind of objective
information is commonly used in studies, the addition of other measures from subjective
sources would have added to the validity and reliability of the study. In addition, the model
presented in this study was general and did not capture the possible moderating effects of
environmental turbulence and uncertainty. Prior research has shown that the effect of CSR
efforts on organizational outcomes can vary substantially with environmental conditions and
therefore, under turbulent conditions, the existence or otherwise of CSR efforts might produce
different results. Finally, other factors which have not been included in this study are also likely
to affect the firm performance. In this study we have only considered whether the companies
had or did not have CSR activities. Therefore, different initiatives of CSR have not been
included in this study. Future research should investigate the linkage between different
initiatives and the company goals. It may also be interesting to observe the change in the
performances of companies after adopting CSR activities, through case studies.
Conclusions and future research
Companies still show some resistance to CSR adoption (Enquist et al., 2006). The general
notion among many businesses is that social responsibility may be detrimental to company
goals and performance. The results from this study contradict this. It has been observed that
CSR companies are better performing in QPS, BG, IN, CC and EO than the non-CSR
companies. Therefore, since the framework includes six types of organizational outcomes,
our findings allow the practitioners to focus on QPS, BG, IN, CC and EO rather than just to
think about FS. In terms of FS, it must be noted that the implementation of CSR efforts
strongly depends on short-term investments (e.g. initial start up costs, training costs,
documentation costs, changeover or process modification costs, operating costs,
compliance costs, waste disposal and pollution prevention costs). Furthermore, once the
key actions of CSR and their outcomes have surfaced, examining sources of admiration
critically will help make the normative issues of what should be done to bring about the most
desired consequences through the interactive planning process clear, thus enabling
different stakeholders to share their goals and interactions.

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Note
1. Companies whose common stock trades on a stock market.

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Corresponding author
Juan-Gabriel Cegarra-Navarro can be contacted at: juan.cegarra@upct.es

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